Local officials appreciate the need to keep an eye on policy developments in our State’s and our Nation’s Capitals. In our Federal system, many decisions made on other levels of government inevitably have consequences for municipalities. As the 115th Congress and the 45th President begin to shape America’s future, New Jersey Mayors and municipal governing body members will need to react to any proposals that could help, or hinder, their ability to meet the needs and promote the interests of their citizens.
One area of interest is investment in our decaying infrastructure.
President-Elect Donald Trump has vowed to deliver a major rebuilding package to Congress within his first 100 days in office. He has called for transportation investments, ranging, on different occasions, from $500 billion to $1 trillion.
His nominee to lead the U.S. Department of Transportation, Elaine Chao, echoed the call to repair the nation’s crumbling infrastructure, during her confirmation hearings, last week. At that time, she indicated that one of her top priorities will be to establish an infrastructure “task force.”
But, aside from the promise of fast action and a proposed level of investment, the Administration has yet to provide specifics on the plan. Based on reactions from Congressional leaders and on hints provided during the transition, this is what we know so far.
It appears that no consensus on an infrastructure package will take shape during the new President’s first 100 days in office.
Pennsylvania Congressman Bill Shuster, who Chairs the House Transportation Committee, has stated the Congress would consider ways to pay for the program during the first 100 days, then consider specific investment alternatives and enact the infrastructure package over the next 100 days. Speaker Paul Ryan has also indicated that the issue is likely to get addressed later in the year. It seems reasonable to anticipate action on infrastructure investments before Congress’ traditional August recess.
Further, though candidate Trump had called for massive transportation investments, with proposals ranging from $500 billion to $1 trillion, the final package could end up being smaller than those initial figures. Congressional Republican leadership, along with rank-and-file Members, has been suspicious of increased spending and the impact it would have on the deficit.
However, those concerns could be abated by the incoming Administration’s strong preference for luring private sector investments in our Nation’s crumbling infrastructure. The new President believes the private investors can complete projects more efficiently and economically than can the public sector.
During the transition, one possibility that was mentioned would provide $137 billion in federal tax credits to companies that finance transportation projects. It was estimated that this could generate up to $1 trillion in investment over 10 years. Additionally, through Public Private Partnerships, investors could bid on projects, agreeing to build and maintain them for a set amount of time, and recover their costs through tolls or set state payments.
Further, we should expect any new infrastructure program to include a roll-back of any regulatory impediments that add costs and delay swift completion of transportation projects. This is a priority for both the incoming Administration and Congressional Republicans. During her confirmation hearings, Transportation Secretary-nominee Chao expressed support for streamlining regulations in any infrastructure proposal. And House Committee Chairman Shuster also views regulatory reform as an important component of any infrastructure plan, saying there are “hundreds” of regulations that should be repealed.
Finally, the new Chief Executive has vowed to follow “two simple rules” when he is in office: buy American and hire American. That, however, could force a show-down between the Administration and the House leadership. Speaker Ryan dropped a so-called Buy America provision from a waterways bill last year. That provision would have required American steel and iron to be used in certain drinking water projects. Critics of the steel provision were concerned that directing federal funding to American providers would create an artificial system of winners and losers, and that it would increase costs.
Lawmakers from both parties have shown willingness to work with the new Administration on rejuvenating the nation’s aging infrastructure. So, on infrastructure matters, it’s fair to say that our 45th President will be in the driver’s seat.
With that in mind, we note one important component of an infrastructure investment program that, to our knowledge, has been discussed by neither Congressional nor Administration officials. We believe it extremely important that a significant portion of any Federal Aid flow directly to local projects. Local officials are responsible for the vast majority of our State’s vital infrastructure. Yet all too often, revenues funneled through State Treasuries never reach the projects most important to local citizens and businesses.
Let’s hope the specifics that emerge – on transportation and on other infrastructure needs – will allow New Jersey municipalities to better serve the people, and protect the future, of our Garden State. We’ll be watching. You should, too.
Contact: Jon Moran, Senior Legislative Analyst, firstname.lastname@example.org, 609-695-3481 x121.