Trump’s Infrastructure Plan Threatens to Leave Little Cities Behind
If you live in rural America, the White House infrastructure proposal released this week might be nice to you. It allocates $50 billion in no-strings-attached spending for communities smaller than 50,000, distributed by their state governments for whatever stuff they need most: better bridges, roads, transit systems, broadband.
If you live in a really big city, it might be OK, too. President Trump’s proposed funding plan flips the status quo to make local governments pay for the majority of infrastructure projects, with the feds kicking in 20 percent instead of its standard 80 (for road projects) or 50 (for mass transit). Still, places with large, rich tax bases—New York, LA, Chicago—could, perhaps, raise the funds necessary to keep the concrete flowing. (A White House official reportedly complimented the liberal den of Los Angeles for funding infrastructure the right way, by recently voting to tax itself to raise transit funds. That’s the kind of strategy this proposal supports.)
If you’re in the middle, though, in a town or a smaller city that hasn’t tapped into post-recession growth, critics say the “Legislative Outline for Rebuilding Infrastructure in America” won’t help you much. It’s long on reform, the sort of streamlining that city officials say is needed to cut down the expensive and aggravating gaps between proposal, design, and construction. But it’s short on actual money, allocating just $100 billion in matching funds over 10 years for infrastructure projects for the whole country.
To allocate those $100 billion dollars, the White House proposes a competitive grant process that would favor applicants that can “secure and commit” continuing funds for their project, including future money for operation, maintenance, and rehab. The ventures, in other words, that can pick up most of the tab.
So if your cash-poor, midsize municipality has potholes, a lacking bus system, and leaky aqueducts, but doesn’t necessarily need a new highway, a brand new streetcar track, or new pipe system, the scheme might not be for you.
Now, this is just a proposal. The plan proposes to use a total of $200 billion in federal funds, offset through unspecified cuts elsewhere in the budget, to trigger serious private sector spending, as much as $1.5 trillion. The scheme has caught grief from both sides of the aisle, and probably won’t pass as is. But the opening salvo from the White House sets the tone for the coming debate.
“The president is almost always the main proponent for how to move policy discourse in the country, so the sheer introduction of all of this loosens up a logjam,” says Adie Tomer, who studies infrastructure policy at the Washington, DC, think tank the Brookings Institution. And whatever the details, there’s a chance the basic idea of the bill—that competitive grant process and scant direct funding—will remain.
That should worry the many smaller cities that just can’t chip in significant money for their own infrastructure. A 2017 survey by the National League of Cities, an advocacy group that represents 19,000 cities, towns, and villages across America, found 31 percent of respondents felt “less able” to meet their expenses than in 2016. Nearly of them said infrastructure cost them more than the year before.
Don’t rush to blame this on fiscal irresponsibility. A recent Brookings Institution analysis shows smaller metros have struggled to keep up with their big brothers after the recession, with private employment, income, and the labor participation rate growing more slowly. A smaller, poorer tax base means not a lot of money to compete for a grant program, or for the attention of a private company with a profit motive.
“The infrastructure plan as proposed seems very much focused on leveraging private and local and state dollars,” says Brooks Rainwater, who oversees the National League of Cities’ Center for City Solutions. “Oftentimes those dollars by the nature of private investment tend to flow to larger cities.” You know, the places where companies can actually make a buck tolling well-trafficked roads or running well-used transit.
Traditionally, these smaller cities use a mix of local sales taxes, gas and diesel taxes, public-private partnerships, even state infrastructure banks to pay for, or at least secure loans to fund, their infrastructure projects. But federal dollars—especially match programs that give them more money than they kick in—have long served as important stopgaps.
No wonder officials from such smaller cities are making unhappy noises. Lawmakers in Buffalo, New York, have cast doubt on the idea the Trump infrastructure program could help them, saying much-needed revamps on a tolling plaza and train terminal would go unfunded without federal help. The infrastructure proposal is “very worrisome,” St. Louis Mayor Lyda Krewson said in a statement, noting the cost-sharing aspects would threaten local projects.
“It’s simply not enough funding going to the cities,” says Mayor Wayne Messam of Miramar, Florida, a 122,000-person city in the Miami metro area. “Now we have to go to our communities to tax our local taxpayers for this infrastructure. The only other option is to increase the debt.” He says his city needs $80 billion in stormwater and sewage improvements. The Trump proposal might force it to space that work out over decades, instead of years.
The proposal includes an additional $20 billion for “transformative projects,” the “ambitious, exploratory, and ground-breaking project ideas that have significantly more risk than standard infrastructure projects.” That could be nice for places hoping to build, say, a hyperloop, as a White House official reportedly told journalists this week, or perhaps the badly-needed tunnel under the Hudson River to serve the New York metro area. But that money is less likely to make it into places that need a new bridge, road, or bus system—the stuff that’s important, but not flashy.
Hyperloop could be sweet, but the nation’s biggest infrastructure problem isn’t a lack of tubes. It’s maintenance. The American Society of Civil Engineers estimates bringing the country’s infrastructure—the roads, bridges, water pipes, electric grid, and so on—up to good condition by 2025 would cost $3.3 trillion.
Maintenance has long been a losing political proposition. “When you rebuild or reconstruct or repair, you have to cut off traffic for it, and you will get a raft of negative articles,” says Beth Osborne, a former Obama administration Department of Transportation official who now advises the advocacy group Transportation for America. “And at the end, you just have the thing you had before.”
The Trump proposal would exacerbate the problem, because maintenance is no way to make money. If you think tolls on new roads are unpopular, try asking drivers for money just because you filled in the potholes (that already cost them money and made sure the bridges won’t crumble. Federal dollars can be for such updates. For now, though, thanks in part to a tax bill that has made money scarce on Capitol Hill, it doesn’t look like there’s much coming down from Washington.
Still, local leaders say they’re happy someone, somewhere is talking about infrastructure—especially after at 2016 election season that featured a lot of talk about big-money building plans. “We’re glad that finally an infrastructure package has been presented,” says Messam, the Miramar mayor. But some city officials still wish the federal government would actually write a $1.5 trillion check.