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June 20, 2017

State Government Needs a Seat at the Table in Infrastructure Investment Debate


The authors, Maine state Rep. Andrew McLean (D) and Texas state Rep. Larry Phillips (R), serve as the 2017-18 co-chairs of The Council of State Governments’ Transportation and Infrastructure Public Policy Committee.

 

President Donald Trump recently spotlighted his plans to spur $1 trillion in infrastructure investment. As state government officials, we welcome a conversation about how to best fund and finance improvements to the nation’s infrastructure. It is a conversation that is long overdue at the federal level and one that we are intimately familiar with in our states.

 

As the president and his team have engaged in formulating principles for an infrastructure plan, they have sought input from the nation’s governors. Early in the administration, the National Governors Association submitted a list of 428 infrastructure projects to the White House for consideration, and the president reportedly planned to meet in early June with 10 governors as part of his infrastructure focus.

 

The Council of State Governments, the only nonpartisan, state government organization representing all three branches of state government, stands ready to contribute to the discussion. As co-chairs of CSG’s transportation and infrastructure public policy committee, we believe it is essential that state legislatures, state departments of transportation and other state agencies also have a seat at the table as decisions are made with regards to infrastructure investment. That’s because state and local governments are the owners and operators of much of the nation’s infrastructure.

 

While we recognize that a comprehensive infrastructure plan has yet to be introduced, several of the key principles for the president’s initiative that were issued in a fact sheet with the president’s budget proposal cause concern for us and many of our fellow state government officials around the country.

 

Of particular concern are principles 2 (Encourage Self-Help) and 4 (Leverage the Private Sector).

 

We believe the former implies a fundamental shift in the way direct federal spending is deployed for transportation in this country. The latter implies an increased reliance on a tool that, while effective on some infrastructure projects, may not work for other projects or in fact for some states.

 

The Trump administration has suggested that the role of the federal government should be to support more communities moving toward a “model of independence.”

 

U.S. Secretary of Transportation Elaine Chao recently said, “States and localities that have secured some funding or financing of their own for infrastructure projects will be given higher priority access to new federal funds. And the goal is to use new federal funding as an incentive to get projects underway and built more quickly with greater participation by state, local and private partners.”

 

Additional federal funding in support of states that seek to increase their own available revenues would certainly be welcome. This year has already seen considerable activity on that front with six states raising gas taxes so far and a number still considering revenue measures. Almost half the states have raised gas taxes in the last four years. But these proposed federal “self-help” funds and incentives cannot be considered a replacement for the formula funding that many states have come to rely on as an essential component of their overall transportation investment.

As for the concept of leveraging the private sector, our experiences in our two states present opposite sides of the argument against assuming that public-private partnerships, or P3s, are the answer to many of our infrastructure needs.

 

While Maine is one of the 37 states with legislation authorizing P3s, its experience with them so far is limited. Maine simply does not have the economies of scale to make large P3 projects a viable option. P3s should be considered a “tool in the toolbox” and not a replacement for traditional funding sources like the fuel tax and other fees and taxes that have supported our transportation system for over 100 years.

 

With some members citing political concerns and public opposition to new highway tolls, the Texas Legislature rejected a bill this year that would have authorized the use of P3s on 18 highway projects costing as much as $30 billion. Despite the success of many of the state’s toll roads in providing new construction, alleviating congestion and fostering economic development, toll fatigue has made it more difficult for the state to consider P3s as the primary option for new projects. This may mean Texas will be sitting on the sidelines and leaving money on the table as other states take advantage of the administration’s efforts to promote private investment.

 

There is no one-size-fits-all approach to meeting the nation’s infrastructure needs. We hope the administration will seek to engage a broader cross-section of the state government community, as well as The Council of State Governments, on these and other issues.

 

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