Paying for infrastructure

SOhio River in Cincinnati Wednesday, President Trump complained that plans to modernize the half-century-old system of locks and dams that serve the river have been badly underfunded, putting a vital commercial waterway at risk. No more, he said, promising to rebuild America so the nation would have “the best, fastest and most reliable infrastructure in the world.”

Fine words from the president. But his promises are completely undermined by his own budget and infrastructure plans.

At a time when the U.S. should be increasing its spending to address an enormous backlog of much-needed modernization projects, Trump has proposed slashing federal funding for key public works programs. His infrastructure plan offers $200 billion over 10 years, a pittance in light of the amount of work to be done. The American Society of Civil Engineers estimates that modernizing the nation’s transportation, water and energy systems would cost $2 trillion over the same time period.

There’s little debate about the need. The country has fallen far behind in maintaining its public works, and it is struggling to meet the demand for new infrastructure to address present and future needs, such as protecting against climate-change-related sea level rise and flooding or moving the voluminous cargo generated by e-commerce.

But instead of accepting the federal government’s traditional responsibility to help pay for vital infrastructure, Trump has outlined a plan that would reduce federal funding and foist more of the cost of large-scale public works projects onto cities, states and private investors. There’s a frustrating obliviousness to history in Trump’s proposal. This is a man who ran on the slogan “Make America Great Again,” but one of the ways America became a developed, prosperous and great nation was through the federal government’s monumental investments in highways, bridges, dams and other engineering feats of the past century.

Under Trump’s plan, the federal government would pay for national infrastructure priorities and make local and state governments pay for regional projects. But the reality is that infrastructure often serves both regional and national interests. For example, clogged highways around the Ports of Los Angeles and Long Beach are a local problem, but they also make it more expensive and time consuming to move imports to the rest of country. Public transit systems serve local commuters, but they also can reduce the nation’s carbon footprint (which would be important to a president who believed in climate change).

Trump’s initiative also ignores the fact that the federal government is already merely a contributor, not the primary funder, of key infrastructure projects. In 2014 the feds kicked in roughly 25% of the $416 billion in public money spent on transportation and water infrastructure, according to the Congressional Budget Office. State and local governments covered the other 75%.

Cities, counties and states are already raising their gas and sales taxes and are passing bonds to help tackle the massive maintenance backlog as well as new needs. (Los Angeles County just passed Measure M, which raised the sales tax, and California adopted Senate Bill 1, which raises fuel taxes, to pay for transportation projects.) That money is supposed to complement, not replace, federal funding. Without federal money it will take longer to build projects, create fewer jobs and increase the backlog of needs.

Trump wants to reduce federal funding by privatizing certain parts of the public infrastructure — from the air traffic control system to highway rest stops — and by making users pay for service. He also want to use private capital to fund new infrastructure projects. He’s not alone in touting the possibilities of such approaches: The Los Angeles Metropolitan Transportation Authority is considering public-private partnerships to build light rail lines and a multi-billion dollar tunnel under the Sepulveda Pass. But socalled P3s are financing models, not a source of free money. The investors who front the funds to build these projects expect to be paid back and earn a profit.

There’s nothing wrong with requiring cities and states to put up more local dollars to help fill the infrastructure backlog. There’s no reason not to look at privatization in certain circumstances, or public-private partnerships. Governments can partner, streamline permitting and cut bureaucracy all they want, but at the end of the day it still takes money to build. With so many existing projects to fix and new ones to build, the U.S. cannot make its infrastructure great again without a major infusion of federal funding.