Spending plan has a catch for Texas, others

Bulk of the funding for infrastructure would come from cities, states

WASHINGTON — A longawaited infrastructure plan President Donald Trump sent to Congress on Monday aims to spur investment in the nation’s ailing highways and bridges but provides little in the way of a road map for Texas and other states looking for ways to pay for new construction.

The plan, which Trump said is intended to “help the states out,” calls for the federal government to invest $200 billion over the next decade to leverage as much as $1.5 trillion in state and private infrastructure spending.

Cities like Houston could use the money for new water projects, road building or public transit.

But there’s a catch for state and local officials: The bulk of the

funding would have to come from their own coffers, either by borrowing, taxing, tolling or cutting budgets.

While Republicans remained largely silent about the plan, Democrats immediately assailed it as unworkable for states and municipalities facing their own budget woes. Texas U.S. Rep. Joaquin Castro, a San Antonio Democrat, called it “not a serious plan.”

The plan, a major campaign plank, was released alongside a $4.4 trillion budget blueprint that calls for cutting a host of domestic programs while pushing up military spending and raising annual deficits over the next decade.

White House budgets annually are proclaimed dead on arrival in Congress and typically are merely starting points in long spending negotiations. But the budgets do underscore an administration’s broad goals, such as privatization under Trump.

‘Invest in people’

That’s why, preliminary or not, the president’s budget plan already is sending ripples through NASA’s Houston-based space community by privatizing the International Space Station by 2025 and redirecting federal investment into a lunar exploration program.

The space station is currently funded only through 2024, but it is widely expected to be extended by Congress.

Texas could feel the effects of Trump’s spending proposals in other ways as well.

In spending for the new fiscal year, which begins Oct. 1, the budget would include $1.6 billion for 65 miles of new border wall along the Rio Grande Valley, which, according to a senior administration official briefing reporters on condition of anonymity, “is based on our priorities given to us by the operators on the ground.”

The administration wants to eventually spend $18 billion on the wall.

The White House also is proposing a $47.5 billion budget next year for the Homeland Security Department, which spends heavily in Texas — a 7.8 percent increase over the present year.

“We continue to invest in people, infrastructure and technology to keep terrorists and unwanted criminals out of our nation,” the White House official said. The budget requests $2.8 billion for 52,000 beds associated with immigration enforcement, an expansion of about 800 in the detention capacity this year and $782 million to hire 2,750 more customs and immigration agents.

Houston-region U.S. Rep. Michael McCaul, chairman of the House Homeland Security Committee, praised Trump’s budget, particularly for its spending on cybersecurity and the border.

But until now, congressional Democrats have fought Trump’s wall funding proposals to a standstill. It’s expected to be central to this week’s debate about the legal status of “Dreamers” and the Obama-era Deferred Action for Childhood Arrivals program.

For Texas, there is more uncertainty surrounding the infrastructure plan as well.

Half of the $200 billion Trump is proposing would create an incentive program to help states that put up their own money for major building projects. The money, awarded competitively, would cover up to 20 percent of project costs.

The plan sets aside another $50 billion for rural infrastructure programs distributed to governors through block grants. Some $30 billion more would be reserved for existing loan programs to attract private financing, and the remaining $20 billion would target “transformative” new projects, possibly including highspeed trains such as the proposed new service between Houston and Dallas.

Trump’s proposal to foster more public-private partnerships for road building mirrors a bipartisan plan sponsored by Texas U.S. Sen. John Cornyn last month to raise the federal limit on taxexempt private activity bonds for infrastructure projects.

The Trump plan does not identify any new public revenue streams for the federal dollars, such as raising the 18.4-cents-agallon gasoline tax, which hasn’t seen an increase since 1993. Instead, officials said the plan would be funded by cuts to other parts of the federal budget.

No longer ‘a roadblock’

In comments to state and local officials Monday at the White House, including Fort Worth Mayor Betsy Price, Trump made clear that the infrastructure push would have to come from the states.

“If you want it badly, you’re going to get it,” Trump told the group. “And if you don’t want it, that’s OK with me, too … because the states will have to do it themselves if we don’t do it. But I would like to help the states out.”

At the same time, Trump promised to streamline federal permits and eliminate regulatory barriers.

“We’re going to get the roads in great shape,” he said. “Washington no longer will be a roadblock to progress.”

Trump also signaled that he would leave it up to the Republican-controlled Congress to get behind his infrastructure plan, which he rated as a lower priority than the recently enacted $1.5 trillion tax, a military buildup and business deregulation.

“If for any reason they don’t want to support it, hey, that’s going to be up to them,” Trump said. “What was very important to me was the military.”

Some state officials cheered the spirit of Trump’s message, even if it didn’t commit Washington to much more money.

“The administration’s infrastructure proposal reflects our shared confidence in the partnership of federal, state and local entities to develop and complete major infrastructure projects,” said J. Bruce Bugg, chairman of the Texas Transportation Commission.

Trump’s plan mirrors many efforts already in motion across Texas. Voters in 2014 and 2015 approved additional money for highways, using oil and gas taxes and a portion of the state’s economic stabilization fund, also called the rainy day fund.

That allowed the transportation commission to plot $70 billion in capital projects over the next decade, a jump of about $20 billion from previous 10-year plans.

Some rules of that spending, however, conflict with Trump’s plan, which heavily leverages private investment. Both Prop. 7, passed in 2014, and Prop. 1, passed in 2015, bar the additional state money from being used to advance toll projects in any way. The transportation commission last month approved its 10-year plan, minus some projects that lawmakers felt blended the state and toll money too closely, even as those projects had broad support in the Dallas and Austin areas.

To get from the $200 billion Trump proposes spending in tax dollars to the $1.5 trillion he pledged for failing roads, bridges, waterways and other projects, the president’s plan relies on publicprivate partnerships that award federal money for 20 percent of major projects.

‘Really big fight’ predicted

Though some states allow metro areas to add taxes for transportation, Texas counties and municipalities are limited. The Houston area’s ability to come up with anything in addition to Metropolitan Transit Authority’s 1 percent sales tax is negligible.

“Asking for local or private investment at 80 percent will mean that every project built in Texas will be tolled,” said Adrian Shelley, director of the Texas office of Public Citizen, a left-leaning public advocacy group.

Tolling, while widespread in Texas metro areas, also is bitterly opposed by some on the left and the right as ultimately costlier for commuters.

“What good does it do us to have the Trump tax cut put money in one pocket and take it out of the other pocket with a toll privatization project,” said Terri Hall, head of the nonprofit Texans for Tollfree Highways.

Hall predicted a “really big fight” with members of Congress, especially over changes that would allow tolling on existing interstate lanes.