Trump’s infrastructure plan is a hot mess. Here's how to fix it

  • Trump's infrastructure plan pleases almost no one. It allocates $20 billion each year over the next decade, a far cry from the $1.5 trillion he touted.
  • Here's why public private partnerships are the best option we have now if we really want to fix our crumbling infrastructure.
Construction crews work on a section of Interstate 20 West that buckled in Decatur, Ga.
David Goldman | AP
Construction crews work on a section of Interstate 20 West that buckled in Decatur, Ga.

President Donald Trump's infrastructure plan has created unbelievable chaos. Some are madder about the plan than they are about his tweets. The plan pleases almost no one.

What was promised – his highly touted plan to invest $1.5 trillion in the nation's infrastructure – had raised hopes of people everywhere that something was actually going to be done about the nation's crumbling infrastructure.

There was bipartisan support because it is obvious that something has to be done immediately to save the country's crumbling infrastructure. The hope of doing anything soon has now died.

The plan allocates very little federal funding. And, perhaps more shocking than anything else is the fact that if the president's infrastructure plan and the budget both passed as written, the result would be a net negative for federal infrastructure funding. Funding offered in the infrastructure plan would be made available by stripping revenue from other infrastructure funding programs.

For instance, the proposed budget would reduce U.S. Department of Transportation funding by $3.7 billion, and $2.8 billion in funding would be cut from the Environmental Protection Agency, both of which have programs that help fund transportation and water projects. And research by the Center for American Progress indicates there are more than $281 billion in other infrastructure cuts throughout the president's budget proposal.

"Based on its pie-in-the-sky algorithms centered on very little direct federal funding, the plan is being met with skepticism at almost every level of government. Local government leaders are already revenue-constrained and swimming in debt. To say they are disappointed is a huge understatement."

As written, the infrastructure plan allocates $20 billion each year over the next decade. But, to get to the promised $1.5 trillion, all other revenue must come from outside sources. State and local government leaders, under the plan, will be required to find or cobble together about 80 percent of a project's anticipated cost before being eligible to compete for federal funding assistance. That's a major hurdle.

Based on its pie-in-the-sky algorithms centered on very little direct federal funding, the plan is being met with skepticism at almost every level of government. Local government leaders are already revenue-constrained and swimming in debt. To say they are disappointed is a huge understatement.

The administration's plan will likely be picked to pieces over the days and weeks ahead, but there is a viable solution to the problem - and it rests with readily available funding from the capital-rich foundations, EB5 programs, public pension funds and private-sector investors. Those alternative funding sources are abundantly available.

Not only is the funding available – the experience and expertise that comes with it is attractive. Other countries have been involved in public-private partnerships for the last three decades. Collaborative joint venture projects have been successful for all types of infrastructure projects. There are "best practices" and decades of excellent guidance available for public officials.

Some want to argue that this type of funding will be more expensive but those detractors have failed to factor in the cost associated with the benefit of transferring all risk of the project to an outside partner. And, while the cost of capital could be some degree greater, many cities and counties cannot incur more debt and citizens don't want user fees. The funding has to come from somewhere. The cost of continued neglect is much greater.

Negative statements also come from citizens who don't understand the benefits of alternative funding options. They fail to realize that at the end of the project the governmental entity will own a new or enhanced public assetSome detractors believe that public private partnerships are only funded through user fees. That's simply not true. There are thousands of examples of infrastructure projects that are funded from retail development around the project that generates revenue for decades.

And, some projects are funded through lease agreements or from savings obtained through efficiencies. Citizens who are concerned about fraud should know that in any contractual agreement for large public projects, the final authority and oversight and transparency is dictated by public officials. Misconceptions related to collaborative engagements have been extremely harmful to infrastructure reform in the U.S.

If and when government officials are willing to step out and announce a stable, well-developed project with a long term repayment model, investors will line up to talk about investing and partnering on the project.

In the case of public-private partnerships, it's a win-win for all stakeholders - investors, the government entity and taxpayers. Not only will most of the cost and risk be borne by the private partner, the public entity will also not have to worry about maintenance or upgrades over the term of the agreement.

The private-sector partner will be responsible and at the end of the contract the new and/or enhanced public asset will be handed back to the public entity. What's not to like about that? The public gets a new or enhanced asset with no debt.

The chances of the administration's plan being passed as written are, as the saying goes, "slim to none." But, Congress has no option at this point – something good must come from this. Time is the enemy and the economic viability of the country is at stake, not to mention the potential for economic prosperity for all citizens.

Commentary by Mary Scott Nabers, a former Texas Railroad commissioner, is the president/CEO of Strategic Partnerships, Inc. She is an expert on partnering public and private entities. Her latest book is "Inside the Infrastructure Revolution: A Roadmap for Rebuilding America."

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