President Trump unveiled his long-awaited infrastructure plan this morning. According to CNN Money, the plan is to turn $200 billion in federal money into $1.5 trillion for fixing infrastructure by leveraging local and state tax dollars and private investment.
The money would come from state and local governments, which are expected to match federal allocations by at least a four-to-one ratio. States have assumed more of the responsibility for funding infrastructure in recent years and this plan would accelerate that trend. In advance of the plan’s release, House Democrats announced their own proposal, which calls for five times the amount of federal funding to be made available.
Half of the new federal money, $100 billion, would be used as incentives to local government. An additional $20 billion would go toward “projects of national significance” to”lift the American spirit,” like New York’s Gateway tunnel under the Hudson River.
Another $50 billion would go to rural block grants according to a formula based on the miles of rural roads and population. States can use that money on transportation, broadband, water, waste and power projects. The rest of the money would go to other infrastructure-related projects, including loan programs like the one operated by the Environmental Protection Agency under the Water Infrastructure Finance and Innovation Act. White House officials say this could leverage up to $40 in local and private money for every $1 in federal investment.
The plan would also shorten the time and expense of getting federal permits by consolidating review processes by different agencies into “one federal decision,” with one agency taking the lead. Currently, the process can take up to ten years.
Trump’s plan also calls for changes to increase the number of skilled construction workers, such as allowing Pell Grants to be used for short-term credentials from places like community colleges and targeting federal work-study funding toward on-the-job training.
At this point, there is no specific funding mechanism for the infrastructure plan. The U.S. Chamber of Commerce has proposed hiking the federal gas tax, which hasn’t gone up since 1993, to raise $394 billion over 10 years. White House officials say they are open to that idea, but haven’t ruled anything out.