DALLAS -- Transportation finance professionals are taking a wait-and-see but optimistic attitude to the election of Donald Trump as the 45th president of the U.S.
Many of the presenters at The Bond Buyer's Transportation Finance/P3 Conference in Dallas were skeptical of the tax credits that Trump proposed to jump-start $1 trillion of infrastructure spending but grateful for a renewed interest in road and transit funding.
"There have been some very intriguing developments for transportation at the national level," said David Narefsky, a partner at Mayer Brown LLP and co-chairman of the conference. "This industry needs to come to an agreement on how we can help shape this infrastructure policy that seems somewhat unformed at this time."
The outlines of the Trump infrastructure policy are not clear, other than a policy paper released by the campaign in October, Narefsky said.
"There are a lot of ideas in there but no details yet," he said. "There are a lot of unknowns but all the information we do know about Mr. Trump's policy on tax reform indicates there could be more investment dollars available for transportation."
Trump's election will focus more attention on the nation's infrastructure needs, said Tim Keith, chief executive officer at Texas Central Partners, which wants to build a privately financed high-speed rail line between Dallas and Houston.
"Mr. Trump's election has reinvigorated the national conversation about infrastructure," Keith said. "It is paradigm shift from a leadership perspective."
Trump is a different type of politician, said Karen Hedlund, director of P3s for Parsons Brinkerhoff.
"When was the last time you heard a Republican say we needed more money for infrastructure?" she said. "Democrats don't want to put money into a public project that makes money for private investors, and Republicans don't want to put public money into anything."
The good news is that both presidential candidates focused on how transportation infrastructure construction and maintenance can create high-paying jobs, said Ron Davis, managing director at Hilltop Securities.
"We're in a new era," Davis said. "The issue of the tax credits is something that we are still trying to quantify. Republicans and Democrats agree that transportation is a must, but the question is how we get there."
P3 proponents are looking for more flexibility from the Trump administration on methods that could open more projects up to private investors and speed the procurement process, said Ted Hamer, managing director at KPMG Corporate Finance LLC.
"Everybody is trying to interpret what the Trump plan means," he said. "We're looking for more flexibility, like giving all states the authority to toll their existing interstate capacity and getting federal loans into the financing plan quicker than it happens now."
David Leininger, chief financial officer of Dallas Area Rapid Transit, said the next few years could be interesting for transit agencies.
"It will be challenging," he said. "Some of the names being floated for secretary of transportation don't give me much comfort."
The linchpin of Trump's 10-year, $1 trillion "American Infrastructure First" would be $137 billion of tax credits to be authorized by Congress.
The tax credits would be available only to investors in revenue-producing projects, such as toll roads, toll bridges, and airports, said Trump economics advisor Peter Navarro, a business professor at the University of California at Irvine.
Companies could bring their overseas earnings into the U.S. at a reduced income tax rate of 10% rather than the current 35%. The tax credits would allow companies to avoid any tax liability by investing $122 million of the repatriated profits into tolls roads, toll bridges, and other revenue-producing projects, Navarro said.
