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With the release of its Legislative Outline for Rebuilding Infrastructure in America, the Trump administration announced its intent to rely on state, local, and private investment to provide the lion's share of new infrastructure funding. Local projects with the highest non-federal share of funding would have priority and a project's economic benefits to the public would take a back seat to revenue potential in the plan's ranking system.
State and local governments today bear 62 percent of the cost of building new transportation and water infrastructure and 92 percent of their annual operations and maintenance costs.
Most of the $200 billion would likely come from cuts in existing infrastructure and other domestic programs—it would not be “new” money on top of current federal infrastructure programs unless Congress acts to raise the gas tax or generate other new revenues.
How the six- or seven-fold increase in state, local and private investment would happen is a mystery. The plan includes $20 billion for federal spending on “transformative projects,” defined as projects with positive impacts unlikely to attract private investment.
Federal retreat is appropriate for projects that largely benefit local populations. But an entirely different class of projects could bring widespread benefits to larger regions and the nation as a whole. Such projects would transcend state boundaries and promote clearly national goals.
Read the full article on the Legislative Outline for Rebuilding Infrastructure by Debra Knopman at RAND