State of the Union features historic public-private partnerships
Highlighting the need to rebuild America’s “crumbling” infrastructure, President Donald Trump asked Congress to approve a sweeping infrastructure renewal partnership on Jan. 30 in his State of the Union address.
While the Administration’s infrastructure plan has been under development since the President took office, the brief outline he unveiled indicated that the real work on infrastructure is ready to begin.
Unique funding from public and private sectors. It also indicated that the majority of funding required will not be coming from the federal government—a radical departure from U.S. infrastructure investment over the last two centuries.
The plan does not have a significant role for buildings, except for building upgrades for the Veteran’s Administration. SMACNA is working with industry coalitions and partners to include public buildings as well as energy and mass transit facilities as part of a list of vertical construction projects.
Specifically, the President called for all parties to stimulate infrastructure value totaling $1.5 trillion by building “gleaming new roads, bridges, highways, railways, and waterways across our land.”
The message was clear: Every level of government and newly engaged private investors will be needed to reach this ambitious goal over the next decade. It will require a dedicated public and private sector funding stream to support projects and upgrades from rural areas to the largest cities and states. Local, state, and federal governments will need to pass appropriation bills through 2030 and beyond to meet and sustain such a historic program if it is to succeed.
Federal incentives would attract greater investments and innovation. The Administration is expected to transmit the plan to Congress in the coming weeks. Outlines of the plan emerged in an overview recently released by the White House, which included a fact sheet along with the budget request, and recent discussion drafts that were circulated among policymakers. These documents reflect a novel strategy in leveraging a small amount of federal spending—up to $200 billion over 10 years—to attract greater investments by state and local governments.
Many infrastructure experts find this novel approach reflects an untested rethinking of the federal government’s role in infrastructure funding. Optimistically, states and local governments desperate for federal and private infrastructure investment hope the plan could potentially unleash a wave of innovation and funding. State and local governments will seek to take advantage of the new federal incentives—including through public-private partnerships and other alternative financing methods.
The plan would also make targeted investments in rural infrastructure and “transformative” projects, as well as provide additional support for a variety of existing infrastructure financing tools, such as the Transportation Infrastructure Finance and Innovation Act and Water Infrastructure Finance and Innovation Act programs and the tax-exempt private activity bonds that are used to finance many projects.
Just as important as the large amount of money needed by all partners to this effort is the Administration’s intentions with respect to infrastructure regulation and permitting. Through an executive order issued last year, the president has already established a two-year goal for completion of the environmental review process for major projects. The additional reforms the Administration is contemplating in its infrastructure plan would go even further.
The anticipated plan on Capitol Hill will be making changes to the underlying federal statutes to significantly streamline and accelerate project approvals. With most permit and review requirements resulting from state and local laws and regulations, this federal remedy will not be easy to achieve.
The Administration’s infrastructure package will be the subject of numerous hearings this spring in Congress with the goal to pass a congressional version by summer.
SMACNA members can weigh in to encourage greater federal support for public building infrastructure and more infrastructure investment in general by contacting their legislators on SMACNA’s Take Action webpage.