Leaked Trump memo may spur Alabama infrastructure effort

Leaked Trump memo may spur Alabama infrastructure effort

A draft plan for the Trump Administration’s “Infrastructure Incentives Initiative” has leaked, offering the first glimpse into a highly-anticipated effort to fund road and bridge improvements across the country.

For Alabama, the draft plan raises major questions as to how the state will compete for grants without a revenue mechanism to match federal funds.

The plan was first reported by Axios’ Jonathan Swan, who seems to be getting all the major scoops from the White House lately. A copy is now available online via the Alabama Daily News here: WH Draft principles.

Titled “Funding Principles,” the eight-page draft memo outlines how 50 percent of the federal road appropriation would be distributed through a competitive grant program to states, local governments and other “Eligible entities.”

Various factors would decide what grant applications are successful, with the most important by far being the ability of entities to raise their own revenue streams for construction and maintenance.

According to the draft plan, 50 percent of the grant application is weighted on “Evidence supporting how applicant will secure and commit new, non-federal revenue to create sustainable, long-term funding.”

Another 20 percent is weighted toward “Evidence supporting how applicant will secure and commit new, non-federal revenue for operations, maintenance and rehabilitation.”

Other factors are weighed much less, such as the full dollar value of a project (10 percent), incorporation of new technologies (five percent), pass-thru efficiencies (10 percent) and the contribution to economic development (five percent).

Should the Trump Administration implement the draft plan as part of a Congressionally-enacted infrastructure bill, there would be an unmistakable and heavy preference toward states and local governments who can pony up their own resources to match federal funds. That could prompt Alabama political leaders and policymakers to move forward on an infrastructure plan of their own.

A proposal to revitalize the state’s aging roads and bridges through new gas tax revenues failed to pass during the 2017 legislative session and appears to be a non-starter in the current session as well. The bill, sponsored by State Rep. Bill Poole (R-Tuscaloosa), would have incrementally raised Alabama’s gas and diesel tax by nine cents a gallon to support a $2.45 billion bond issue to build and repair roads and bridges across the state. While the bill saw widespread support from legislative leadership, the governor, and trade associations during the 2017 regular session, it failed to receive enough votes to clear a procedural hurdle in the House.

After lawmakers expressed dissatisfaction over various details of the plan, House Speaker Mac McCutcheon declared the infrastructure bill “dead” and said it would not come up again in this legislative term.

 

Republicans’ reluctance to tax increases – even a gradual nine cent user fee increase – is not likely to abate in an election year. However, if Congress and the Trump Administration succeed in passing the estimated $200 billion infrastructure investment plan this year, Alabama could find itself at a disadvantage to other states who are leveraging new revenues of their own to match potential federal funds.

 

Speaker McCutcheon said a legislative working group has been established to think through the myriad variables of the future of state infrastructure with the hopes that a viable plan could pass next year. Should Congress act this year, the time needed to implement the policy should give the state the opportunity to enact an updated proposal in the 2019 session, the Speaker said.

 

“Finding a solution to Alabama’s crumbling infrastructure is going to require an ‘all hands on deck’ approach from the House and Senate, the Governor’s Office, various stakeholder groups, and, most importantly, the general public,” McCutcheon said. “Reports indicate that President Trump is working to keep his promise of investing in our roads, our bridges, and other infrastructure, but states like Alabama must be ready to hold up our end of the bargain in order to participate.”

 

Even if timing is not an issue, one risk to waiting until next year could be the influx of newly-elected state legislators. A high number of House and Senate members are retiring or seeking different office, meaning many new faces are expected in the State House beginning in 2019. None of them will have been a part of a legislative working group, and some could balk at the prospect of casting one of their first votes to raise a tax.

 

For her part, Gov. Kay Ivey is urging lawmakers to act. In an op-ed to AL.com last year, Gov. Kay Ivey made the case for increasing the state’s infrastructure investment, noting that Alabama’s roads and bridges received a D+ rating on the most recent report card from the American Society of Civil Engineers.

 

After praising President Trump’s blueprint, Ivey did not mince words.

 

“For a state to take advantage of the President’s plan, it must be ‘ready, willing, and able’ to make a financial investment of its own. Investing more in our state’s infrastructure is simply a good business decision for Alabama,” she wrote.

 

State leaders have always known that demonstrating the ability to put up matching funds would be necessary to access  new federal infrastructure appropriations. With the leaked White House memo, they now know just how much the Trump Administration is counting on states to invest monies of their own.

 

Whether it comes this session or next, that is likely to spur the state to adopt an infrastructure plan of its own.