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Trump infrastructure plan relies on private investment, officials say

The $1.5 trillion proposal does not fund the Gateway transit program for New York and New Jersey, which would include a new Hudson River tunnel, officials say.

President Donald Trump, seen here on Jan. 30,

President Donald Trump, seen here on Jan. 30, 2018. Photo Credit: AFP / Getty Images / Mandel Ngan

WASHINGTON — The $200 billion infrastructure plan that President Donald Trump is to unveil Monday as part of his proposed 2019 budget would, as expected, force New York and New Jersey to scramble for private investors to fund the Gateway transit program.

But Trump’s proposal, which relies on creating incentives for private investment to create $1.5 trillion in infrastructure spending over the next decade, faces strong opposition by Democrats and likely will be reshaped by lawmakers in Congress.

Under Trump’s plan, New York and New Jersey would have to turn to local government and private sources of funding after Trump administration officials last year rejected claims that the Obama administration committed to the use of federal funds for half of Gateway’s cost.

A White House official said Saturday Trump is open to discussing a federal funding plan to help pay for the $30 billion in Gateway transit projects, which include a $13 billion Hudson River tunnel between New York and New Jersey, but he won’t approve paying for half the costs.

“While we certainly aren’t opposed to talking about Gateway, we’re not going to start the discussion of rebuilding our entire nation with a single — albeit large — project, especially not one where 90 percent of the benefits go to local transit riders,” the White House official said.

Under Trump’s plan, the federal government would spend $100 billion to match state and local funds for up to 20 percent of the cost of projects; offer $20 billion in loans; send $50 billion to states for rural work; set aside $20 billion for nonrepair projects that focus on modernization; and use $10 billion on capital financing.

The plan also aims to significantly shorten the environmental permitting process, which can take years of data-gathering and litigation, by giving one agency overall authority for each project to complete the process in 21 months and issue permits in three months, another senior White House official said. And it would provide job training for workers.

Trump is set to host a meeting with state and local officials on his proposal Monday, but it is not clear whether any will be from New York.

White House officials said they hope the long overdue need for repairing crumbling bridges, roads and other infrastructure, and popular support for such fixes, will draw strong bipartisan support in Congress for the plan.

“With the proposal they made, it’s hard to see how you could build Gateway,” Senate Minority Leader Chuck Schumer (D-N.Y.) said at an unrelated news conference Sunday. He called for sticking with the tradition of federal funding for infrastructure.

Schumer said he’s worried Trump officials will say, ‘Let the private sector do it.’ ” He added, “That will result in tolls — Trump Tolls, I would call them — across the country in highways that we now are able not to have tolls on.”

Michael Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago, said the Trump administration’s attempt to leverage local government funds for infrastructure may not work because municipalities don’t have the money.

“I do have doubts that it’s going to generate the infrastructure investment with local funds,” said Pagano, citing his annual survey, which found last summer that municipal general funds still haven’t rebounded to their 2006 level before the Great Recession hit.

And he said if local governments do engage in the Trump plan, it could result in an even heavier tax burden on residents in New York and other high-tax states, where many taxpayers likely will pay more federal taxes because they can deduct only $10,000 in state and local taxes from their federal returns.

“Are they going to be willing to have their taxes raised even more to leverage federal dollars for their state’s infrastructure?” Pagano asked.

With Vincent Barone

Trump’s infrastructure plan

President Donald Trump’s infrastructure plan calls for $200 billion in federal funding aimed at spurring $1.5 trillion in new infrastructure projects through a series of public-private partnerships. Here’s how the federal money will be spread out:

  • $100 billion: Matching fund grants to state and local governments to pay for up to 20 percent of project costs
  • $50 billion: Focus on rural infrastructure improvements
  • $20 billion: Capital improvement loans for projects
  • $20 billion: Nonrepair projects that focus on modernization of the U.S. infrastructure
  • $10 billion: Capital financing fund to pay for existing federal building projects

Source: The White House

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