On Monday, the White House released the Legislative Outline for Rebuilding Infrastructure in America, President Trump’s proposal to create $1.5 trillion of new investment for infrastructure and public works projects.  The proposal leverages $200 billion of federal funds with permitting and environmental review reforms to attract $1.3 trillion of investment from state and local government and private industry.  

Under this legislative outline, the $200 billion of federal funds will be allocated across four programs:

  • Infrastructure Incentives Program ($100B): States would be required to establish a sustainable non-federal funding stream equal to 80% of project costs, which would be matched with 20% federal funding.  This would be aimed at traditional areas of federal investment, i.e., transportation, water/sewer.
  • Rural Infrastructure Program ($50B): This funding would come via grants to states with no matching funds required, and would be aimed more broadly than traditional federal investment by including broadband and electrical power in addition to transportation and water/sewer.  Eighty percent of funds under the Rural Infrastructure Program will be provided to the governor of each state distributed based on the state’s rural population.  Broadband deployment infrastructure, a critical need for rural Americans, is an eligible asset class to receive project funding from the Rural Infrastructure Program.
  • Transformative Projects Program ($20B): The federal government would put up funding for 30%, 50%, or 80% of the project cost (depending on project stage).  This would be aimed at projects that are commercially viable but have much higher than usual risk/reward.
  • Infrastructure Financing Programs ($20B): The proposal would expand several existing federal programs through additional funding and broader eligibility, including the TIFIA and WIFIA programs and private activity bonds (PABs).

In addition, the infrastructure proposal includes language that seeks to expand workforce development programs and reduce the federal regulatory burden for private infrastructure projects.  The approaching 2018 midterm elections cast doubt on the future of an ambitious infrastructure package and the proposal was met with skepticism from Republican Chairmen of committees with jurisdiction on infrastructure, Representative Bill Shuster (R-Pennsylvania) and Sen. John Thune (R-South Dakota). 

After he released his proposal, President Trump made infrastructure headlines again this week when he told lawmakers that he would support a $0.25 increase in the gas tax.  This move would raise $396 billion in new revenue over 10 years that would help pay for future infrastructure projects.