Trump’s proposed budget hits transportation

Budget books

Calls for more infrastructure investment but cuts loan programs and grants, opens doors to more tolls

President Donald Trump’s budget proposal released Wednesday calls for a loosening of restrictions on tolls, more private investment in infrastructure, cuts a critical loan program used by manufacturers to build fuel-efficient vehicles, and reduces workforce training grants that are used to train truck drivers and other transportation workers.

In a six-page fact sheet accompanying the proposed budget, Trump’s thoughts on tolls and more are given more context than previous outlines. Among those is the idea that providing federal dollars for local projects is not a solution.

“The flexibility to use federal dollars to pay for essentially local infrastructure projects has created an unhealthy dynamic in which state and local governments delay projects in the hope of receiving federal funds,” the fact sheet reads. “Overreliance on federal grants and other federal funding can create a strong disincentive for non-federal revenue generation.”

Instead, the budget calls for $200 billion over 10 years to be used to repair and upgrade the nation’s infrastructure. The remaining $800 billion of the proposed $1 trillion plan Trump called for would be generated through private investment.

“Providing more federal funding, on its own, is not the solution to our infrastructure challenges,” the document reads. “Rather, we will work to fix underlying incentives, procedures, and policies to spur better infrastructure decisions and outcomes, across a range of sectors.”

The president believes that public-private partnerships can help and will improve the efficiency and cost-effectiveness of infrastructure projects.

“While public-private partnerships will not be the solution to all infrastructure needs, they can help advance the Nation’s most important, regionally significant projects,” it says.

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.
— Trump administration fact sheet

Oregon Rep. Peter DeFazio says the $200 billion investment will simply push “the responsibility off federal balance sheets, and [replace] it with unidentified incentives for Wall Street investors to invest in transportation.”

In addition to calling for more private investment, the administration’s desire to loosen toll restrictions – which are generally banned on Interstate highways – is a major initiative for commercial trucking operations.

“Tolling is generally restricted on interstate highways,” the administration notes. “This restriction prevents public and private investment in such facilities. We should reduce this restriction and allow the states to assess their transportation needs and weigh the relative merits of tolling assets. The administration also supports allowing the private sector to construct, operate, and maintain Interstate rest areas, which are often overburden and inadequately maintained.”

Naturally, reactions are mixed to this proposal.

“To complement the proposed $200 billion for infrastructure projects included in the President’s FY 2018 budget and the administration’s call for regulatory reform, Congress should lift the ban on tolling Interstate Highways,” Patrick Jones, executive director and CEO of the International Bridge, Tunnel and Turnpike Association said in a statement. “Congress should give states access to one more tool in the toolbox by allowing them to toll their Interstate highways specifically to rebuild them.  This wouldn’t be a mandate; no state would be required to toll their interstates.  This would simply give states an option, the flexibility to choose tolling if it makes sense to them.

The Alliance for Toll-Free Interstates, however, is unhappy with the plan. “We are very concerned about how heavily the Trump administration wants to rely upon public-private partnerships to fund our roads and the idea of loosening the federal restriction on tolling interstate highways,” said ATFI Spokesperson Stephanie Kane. “As outlined in the proposed budget, leveraging $200 billion public dollars into a $1 trillion transportation plan will only be possible through widespread tolling to produce private sector profits.”

The budget outline also calls for the elimination of dozens of programs, including the Advanced Technology Vehicle Manufacturing Program which helps fund fuel-efficient vehicle research.

"The private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies," the White House said.

Also cut is funding for the Workforce Innovation and Opportunities Act (WIOA). WIOA provides funding for employee training programs, which could hit truck driving schools and other programs that train employees for work in the transportation industry.

Don Lefeve, president and CEO of the Commercial Vehicle Training Association (CVTA), blasted the proposal.

“We are disappointed by the Trump administration’s proposal to drastically cut Workforce Innovation and Opportunities Act grants by nearly $1 billion. WIOA is a critical funding source, which allows thousands of individuals to receive the education and training needed to enter in-demand careers like commercial truck and bus driving,” Lefeve said. “The trucking industry is facing a driver shortage and cuts to programs like WIOA will further exacerbate this problem. WIOA grants help Americans acquire the training needed to obtain a commercial driver’s license, gets people back to work, and keeps our nation’s economy moving forward.”

Also in the budget proposal, the president is calling for:

  • An expansion of the Transportation Infrastructure Finance and Innovation Act (TIFIA) Program. TIFIA helps finance surface transportation projects through direct loans, loan guarantees, and lines of credit. One dollar of TIFIA subsidy leverages roughly $40 in project value. If the amount of TIFIA subsidy was increased to $1 billion annually for 10 years, that could leverage up to $140 billion in credit assistance, and approximately $424 billion in total investment.
  • Lift the cap on Private Activity Bonds and expand eligibility to other non-federal public infrastructure. The PABs program allows the Department of Transportation to allocate authority to issue tax-exempt bonds on behalf of private entities constructing highway and freight transfer facilities. The administration recommends removing the $15 billion cap under current law to ensure that future P3 projects can take advantage of this cost-saving tool, and encourage more project sponsors to take advantage of this tool. The Administration also supports the expansion of PAB eligibility.
  • Incentivize innovative approaches to congestion mitigation. The Urban Partnership Agreement Program – and its successor, the Congestion Reduction Demonstration Program – provided competitive grants to urbanized areas that were willing to institute a suite of solutions to congestion, including congestion pricing, enhanced transit services, increased telecommuting and flex scheduling, and deployment of advanced technology. Similar programs could provide valuable incentives for localities to think outside of the box in solving long-standing congestion challenges.