Trump's infrastructure plan could harm states facing budget shortfalls

  Feb.14--PRESIDENT Trump has unveiled his infrastructure plan that is heavily crafted around the idea of states' creating their own projects. But experts and authorities in some states are apprehensive about how the programme might play out, according to New York's Fortune magazine.

  The plan unveiled by the Administration is a starting point for negotiations in Congress calling for investing US$200 billion in federal funds in infrastructure projects, which it says would create $1.5 trillion in investments over the next decade.

  Half of that money comes in the form of incentives for states to establish their own infrastructure projects. But the federal government would only invest a maximum of 20 per cent in these projects, leaving it to the states to find other sources of revenue, like imposing higher tolls on roads.

  "Washington will no longer be a roadblock to progress; Washington will be your partner," Trump said at a meeting with various state officials while describing his plan.

  Some experts, such as Marcus Lemon, an attorney at Polsinelli and former chief counsel to Federal Highway Administration from 2007 to 2009, say this proposal could actually help state and local budgets, because it provides more clarity about federal contributions, thereby forcing them to adapt accordingly.

  But others argue the proposed mechanism, if implemented into law, could be harmful to certain states, particularly those battling budget shortfalls. In 2017, that was 22 states, according to the Centre on Budget and Policy Priorities, including at least 10 that voted for President Trump in the 2016 election.

  "I think many states would have a serious challenge in providing 80 per cent of funding for viable infrastructure projects," said one lobbyist closely involved in tracking the issue, referring to the component of the White House plan that caps federal investment at 20 per cent.

  "It would unfortunately create a situation where we would have some states who are better than others and the long-term viability of a national infrastructure network would be at stake."

  The lobbyist said that rural states would be most adversely impacted, noting that even though Trump's plan includes $50 billion in federal funding for rural infrastructure projects, that may be a high enough compensatory figure. And governors and lawmakers, mainly Democrats, were quick to seize on the first point about the potential negative impacts to certain states.

  "[Trump's] plan would essentially throw states a few Legos when what we really need is concrete and steel," said Washington Governor. Jay Inslee, chairman of the Democratic Governor's Association, whose state was the site of a fatal Amtrak crash at the end of 2017. "His $1.5 trillion plan expects state, local and private partners to pick up more than 85 percent of the tab. States cannot and should not bear the burden of building a 21st century infrastructure system on our own."

  "The president's infrastructure proposal would do very little to make our ailing infrastructure better, but would put unsustainable burdens on our local government and lead to Trump tolls all over the country," said Senate Minority Leader Chuck Schumer.

  However, Mississippi Governor Phil Bryant, whose state faced a revenue shortfall of $116 million last year, was effusive about the White House's plan.

  "This new plan is going to be, really, the catalyst that will change states like Mississippi, move us to that new level. .I hope, a hundred years from now they're thinking about the day that we were in this room and what happened this day."


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