WHAT: The Federal Government provides important infrastructure funding but often does so in an inefficient way and with numerous restrictions.
The Federal Government funds around 20 percent of total infrastructure investment, not the 80 percent some critics claim. The level of Federal infrastructure investment varies by sector. For example, Federal funding accounts for 28 percent of highway investment and 4 percent of water infrastructure investment, when you consider capital, operations, and maintenance costs.
Federal revenues depend on taxpayers at the state and local level, yet Federal infrastructure funding is too often directed by Washington’s priorities. When Federal funding does eventually make its way back to the State and local level it comes with numerous strings attached. Federal highway funding alone comes with 99 rules and requirements.
Federal impediments to infrastructure improvements remain despite the fact that State and local governments own the vast majority of all governmental infrastructure.
WHY: The President’s infrastructure proposal maintains the traditional balance of Federal and non-Federal funding, while investing in a way that stretches every dollar and delivers on local needs.
President Trump’s proposal for rebuilding infrastructure in America is in line with the traditional balance of Federal, State, and local infrastructure investment. The President’s proposal will keep existing Federal funding in place, including for the Highway Trust Fund. It will provide new funding that stretches each taxpayer dollar and increases overall investment for a net economic benefit to the Nation.
Half of all Federal funds in the proposal will go to an Incentives Program. The Incentives Program will provide grants to State and local applicants to promote new infrastructure investment. Coupled with divestiture of Federal assets that are more appropriately owned by the State, local, or private entities, this system will keep infrastructure funding decisions out of the D.C. bureaucracy and in State and local hands.
President Trump’s proposal will ultimately result in significantly more investments to repair and modernize American infrastructure.