Trump Infrastructure Plan Worries State Highway Officials

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DALLAS -- State highway officials warn that the political focus on President-elect Donald Trump's $1 trillion infrastructure proposal is obscuring the need to find a long-term source of federal transportation funding.

"Any responsible new infrastructure funding proposal needs to take into consideration and address the long-term solvency of the Highway Trust Fund," said a resolution adopted by directors of the American Association of State Highway and Transportation Officials.

The state transportation department executives said last week that the Highway Trust Fund, which supports almost all federal highway and transit funding, will be in bad fiscal shape at the end of the current five-year federal surface transportation bill without new revenue to support the dedicated fuel tax collections.

The HTF's annual revenue will have $20 billion per year less than expected expenditures when the Fixing America's Surface Transportation Act expires at the beginning of fiscal 2021. The funding law, which was enacted in late 2015, required general fund transfers totaling $70 billion to support federal transportation funding over five years.

Trump's $1 trillion proposal relies on $137 billion of tax credits that Congress would be asked to authorize, possibly as part of a larger tax reform plan. Investors would get an 82% tax credit on investments in revenue-producing transit, highway, and bridge projects that could be financed as public-private partnerships.

The Trump proposal might free up some public funding for other projects, but would do nothing to enhance the long-term stability of federal surface transportation funding, according to the AASHTO board.

"In the first term of the next president, the HTF will once again be facing significant revenue shortfalls that will create uncertainty and lead to disruptions in states delivering their transportation programs," the directors said.

The resolution urges the Trump administration and Congress to support the HTF "by providing real, reliable, dedicated and sustainable revenue sources derived from the users and beneficiaries of the system."

Another resolution adopted by the AASHTO board asks Congress to pass a fiscal 2017 transportation appropriations bill before the current short-term funding resolution expires on Dec. 9.

Lawmakers froze federal transportation funding at 2016 levels with adoption of a continuing resolution before recessing in September for the elections. Rep. Hal Rogers, R-Ky., chairman of the House Appropriations Committee, said last week he wants to extend the resolution through March 31.

State transportation departments that had been anticipating the annual increases in federal funding provided by the FAST Act are being hampered by lawmakers' inability to pass the fiscal 2017 budget, the highway executives said.

The group asked Congress to adopt a fiscal 2017 appropriations measure next month that would tap into the 2% to 4% increases in annual funding promised in the FAST Act.

The funding extension could also delay issuance of the 2017 round of special freight-related grants as well as the Transportation Investment Generating Economic Recovery annual discretionary infrastructure grants, the AASHTO board said.

The policy positions adopted at last week's AASHTO meeting in Boston were developed by a joint committee of AASHTO, the American Road and Transportation Builders Association, and the Associated General Contractors of America.

A 2.2% drop in public sector infrastructure investments in the first nine months of 2016 has left many construction companies worried about finding enough transportation infrastructure work in 2017, said Ken Simonson, chief economist for the Association of General Contractors.

"Firms that perform public sector work are having a hard time finding enough work to keep their teams together," Simonson said. "These firms would definitely benefit, and be able to handle, the kinds of infrastructure investments the president-elect and Congress have been discussing."

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