Trump’s Budget Reduces Transportation Spending - Global Trade Magazine
  March 3rd, 2018 | Written by

Trump’s Budget Reduces Transportation Spending

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  • Trump infrastructure plan limits federal matching funds to 20 percent of project costs.
  • The administration’s infrastructure scheme it gives minimal consideration to the cost-benefit analysis of projects.
  • There are other places in Trump’s budget where spending on transportation is cut.

President Donald Trump’s 2019 Budget was unveiled the same week as the administration’s infrastructure proposal, pointing a spotlight on how both schemes would impact spending on transportation.

For all the talk of a $1.5 trillion infrastructure plan, the administration’s plan provides only $100 billion of matching funds to state and local governments, in addition to $50 billion for rural infrastructure and $50 billion in other spending—and that’s over ten years. The matching funds are intended to be leveraged by state and local actors, but, with a limit of 20 percent to federal participation, represents a much lower level for infrastructure spending historically.

It’s worth noting that if states and  localities can’t or won’t come up with their shares, even the paltry sums included in the budget won’t be spent.

There are also other places in the budget where spending on transportation is cut, a recent report from Brookings points out, “making the net new federal investment possibly much smaller.”

Other concerns the administration’s matching funds scheme is that it gives minimal consideration to the cost-benefit analysis of new investments. Five percent of the federal evaluations would focus on “evidence supporting how the project would spur economic and social returns on investment.” The administration’s main selection criteria will be whether states generate new revenue sources for infrastructure. That means, according to the report “that projects may be selected based on funding options in the states, not the overall national benefits.” Given the administration’ emphasis on attracting private capital to infrastructure projects, the end result may be to allocate spending away from projects “that are true public goods and are not attractive to private investors.”

The report advocates applying cost-benefit analyses to the selection of projects and non-political processes—through an infrastructure bank, for example—to allocate investments and “maximize the effectiveness of taxpayer funds.”

“A properly funded federal infrastructure investment plan, informed by the best available evidence,”the report concluded, “is sorely needed.”

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