Slideshow 2018 outlook for infrastructure

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  • December 22 2017, 12:55pm EST
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Chris Hamel, managing director and head of municipal finance at RBC Capital Markets, worries that private activity bonds could be used as a pay-for in legislation on infrastructure investments.

The administration appears to be headed toward prioritizing infrastructure projects where a state or local government has created or identified revenue streams that can support them over their life cycles, said Michael Decker, managing director and co-head of municipal securities for the Securities Industry and Financial Markets Association.

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“The president is whistling past the graveyard if he thinks $20 billion a year additional investment in American infrastructure by the federal government is going to do anything,” said Ed Rendell, the former Pennsylvania governor who co-founded Building America’s Future, a bipartisan coalition of elected officials promoting infrastructure investment.

“I think the tax bill was a missed opportunity” where Congress could have included infrastructure initiatives, said Jack Schenendorf, of counsel at Covington & Burling.

“Most of the state departments of transportation, the Chamber of Commerce and the construction industry have had a consistent message all along,” said Jeff Davis, senior fellow and editor at Eno Center for Transportation. “They say, ‘New infrastructure programs are nice but the top priority should be to make sure existing programs don’t run out of money in 2020 — put them on a solvent basis permanently.’ And the administration’s proposals to date have dodged that issue.”

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“There were some pretty significant tools for infrastructure that were thrown out by the tax bill, like advance refundings,” said Emily Brock, director of the Government Finance Officer Association’s Federal Liaison Center. “Unfortunately [tax-exempt advance refundings provided] the opportunity to save money to make infrastructure investments and now that tool is gone.”

The Democrats could try to hold off any legislation on infrastructure, hoping to win enough seats in the Senate or House during the midterm elections to regain a majority in one of those chambers, said Casey Dinges, a senior managing director at the American Society of Civil Engineers.

“I still think [public-private partnerships] and finding a way to bring the private sector into the fold is going to be a piece of the plan,” said Jim Tymon, chief operating officer of the American Association of State Highway and Transportation Officials.